Vehicle to Grid (V2G) Market is expected to reach $8.06 billion by 2025 at a CAGR of 47.2% during the forecast period 2020-2025. Increasing awareness for smart power generation coupled with rising adoption of autonomous vehicles has significantly triggered the demand for V2G technologies. In addition, Governments are expected to expand incentives to accelerate the adoption of battery-powered vehicles resulting in an expansion of the V2G market. In 2019, Chinese government has planned to invest $800 billion in autonomous electric vehicles, high-speed rail, smart grid technology, powerful 5G networks shared mobility, and big data technologies by 2030. This kind of investments will drive the market in the forecast period 2020-2025.
Vehicle to Grid (V2G) Market Segment Analysis - By Vehicle Type
Plug-in Hybrid Electric Vehicles (PHEVs) is expected to register the fastest growth during the forecast period owing to large battery size and high power return capacity. Moreover rising investments for the production of Plug-in Vehicles will drive the market in the forecast period. In 2019, Ford has committed to invest $11 billion in electric vehicles, with special interest towards the production of plug-in hybrids. Similarly, in 2020, General Motors Co. has committed to invest $2.2 billion to build a plant in Michigan that will make all-electric vehicles both battery and plugin by 2025. Increased investments as such will provide significant opportunities for V2G deployment in the forecast period 2020-2025.
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Vehicle to Grid (V2G) Market Segment Analysis - By Industry Vertical
Electric Vehicle Supply Equipment in V2G segment is growing at a CAGR of 52.71% in the forecast period, owing to their increasing usage for connecting electric vehicle to the grid. The EVSE are the main component that connects EV to the electric grid and thus increasing trend for renewable and smart energy generation will drive the demand for EVSE components. In addition deployment of vehicle-to-grid (V2G) technology is observed as an opportunity in the EVSE market. This technology enables electric vehicles to supply the stored electricity back into the electricity grid to support supply energy at times of peak demand. Moreover, The major benefit from this technology can be seen in fleet operators’ vehicles, when plugged into V2G bi-directional chargers during their idle time. The integration of this technology in the electric vehicles can offset the cost of vehicle ownership by selling power stored in the battery back to the electricity grid. Hence, V2G is being seen as the opportunity for the players operating in the EVSE.
Vehicle to Grid (V2G) Market Segment Analysis - By Geography
North America dominated the market by a market share of more than 34.5% in 2019, early adoption for new technologies and environmental awareness among the public are the key factors contributing to the market growth. Government initiative in terms of incentives offered by them to promote the electric vehicle adoption in the region. Furthermore, the auto-manufacturers in the regions are offering a long-term warranty to their customers that again fuel the market growth is analysed to drive the market. In 2020, U.S. government has announced an investment of $750 million to electric-vehicle infrastructure as part of the country’s long-term goal to reduce emissions. Similarly, government of Canada is also investing heavily for the development of V2G infrastructure. Hence these factors are analysed to drive the market in the forecast period 2020-2025.
Vehicle to Grid (V2G) Market Drivers
Reduction in Carbon Emissions and Energy Savings
Electric vehicles mostly use batteries, and this causes a reduction in carbon emissions by giving preference to battery-operated vehicles. Increasing adoption of electric vehicles has lowered carbon emissions, thereby improving the air quality. Since V2G technology is implemented in electric vehicles, it indirectly helps reduce carbon emissions. Several regions are adopting this technology in order to reduce the emission rate. From past records, Europe has taken major initiatives in the deployment of electric vehicles and V2G technology. For instance, in September 2019, Nissan Motor Co. Ltd., a Japanese automotive giant announced to work with a French utility company EDF Group to accelerate the adoption of electric vehicles across Europe through smart charging. Similarly, countries such India, China, U.S have been investing heavily for the deployment of this technology in order to reduce the emission rate. Hence these factors are analyzed to drive the market in the forecast period 2020-2025.
Rising collaborations between companies
Manufacturers are focusing on collaborations and partnerships with other players (electric vehicle manufacturers) in order to promote vehicle-to-grid technology. In February 2019, OVO Energy Ltd announced that Mitsubishi Corporation invested in the company at an exchange of a 20% stake in the business. The company has the intention to invest the amount in an emerging market in Asia Pacific and Europe for the acceleration of intelligent energy technologies in the regions. In June 2018, Mitsubishi and Hitachi collaborated to set up a vehicle-to-grid charging network for battery electric vehicles and plug-in hybrid electric vehicles at several locations across Japan. This collaboration is expected to lead to the development of a sustainable business model for renewable energy and stabilization of power networks. Such strategic partnerships by manufacturers with different car manufacturers and energy companies are augmenting the global V2G technology market.
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Vehicle to Grid (V2G) Market Challenges
Traffic Barrier while using Mobile Devices
Although V2G market is growing at a rapid phase, the high initial cost of the technology is expected to hinder the market growth. The high initial investment of V2G is due to battery degradation, the need for intensive communication between the vehicles and the grid, effects on grid distribution equipment, infrastructure changes, and social, political, cultural and technical obstacles. Hence the high initial investment hinder the market growth in the forecast period 2020-2025.
Vehicle to Grid (V2G) Market Landscape
Technology launches, acquisitions, Partnerships and R&D activities are key strategies adopted by players in the Vehicle to Grid market. In 2019, the market of Vehicle to Grid industry outlook has been fragmented by several companies. Vehicle to Grid top 10 companies include AC Propulsion, Edison International., DENSO Co., Boulder Electric Vehicle, Nissan Motor Corporation, Enerdel, EV Grid, Hitachi, Next Energy, NRG Energy, OVO Energy Ltd., among others.
Acquisitions/Technology Launches
In 2020, Hyundai Motor Company is planning to launch V2G (Vehicle to Grid) electric vehicles that can use electricity stored in a battery of another electric vehicle.
Key Takeaways
North America dominated the market by a market share of more than 34.5% in 2019, early adoption for new technologies and environmental awareness among the public are the key factors contributing to the market growth.
Electric Vehicle Supply Equipment in V2G segment is growing at a CAGR of 52.71% in the forecast period, owing to their increasing usage for connecting electric vehicle to the grid.
Plug-in Hybrid Electric Vehicles (PHEVs) is expected to register the fastest growth during the forecast period owing to large battery size and high power return capacity. Moreover rising investments for the production of Plug-in Vehicles will drive the market in the forecast period.
Vehicle to Grid top 10 companies include AC Propulsion, Edison International., DENSO Co., Boulder Electric Vehicle, Nissan Motor Corporation, Enerdel, EV Grid, Hitachi, Next Energy, NRG Energy, OVO Energy Ltd., among others.
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